The Brave New World of College Branding

Then I noticed the phrase "Master of Applied Positive Psychology (MAPP) program." "Diploma mill," I thought, and went for the spam filter.

Then I saw "University of Pennsylvania." "Either a scam or something interesting," I thought, and read further. Which one it was depends on your perspective. Most evident was the power of an institutional brand.

There really is a MAPP program at Penn. Its director, Martin Seligman, is a former president of the American Psychological Association and the author of many self-help books. According to a brochure, the program "allows students to earn a world-class graduate degree without interrupting their careers," by going to the campus for just one weekend a month. The rest of the classes, including "Applied Positive Interventions" and "Approaches to the Good Life," are taught "via a variety of distance-learning methods."

MAPP takes one year to complete and costs $45,551. No financial aid is available. Room and board are extra.

The modern world is confusing with its myriad options. Brands make things simpler by giving consumers an easier way to choose one product over another. People buy some branded products purely for the feelings their names invoke, apart from the product itself. Have a Coke—and a smile.

Indeed, Coca-Cola is the most valuable brand in the world, according to one recent survey. The name alone is worth $77.8-billion. Making fizzy brown sugar water isn't difficult. The brand is what sells 1.8 billion servings a day.

Elite universities also have highly valuable brands. The average person on the street has never been to Cambridge, Mass., and couldn't name a single person employed by Harvard University. But she probably has strong positive feelings about the Harvard name.

Nonetheless, those elite institutions face a dilemma: What to do with the single most valuable asset they own? At corporations, the answer is obvious: Slap the brand on more things and get rich. Thus, Diet Coke, Coca-Cola Classic, Coke Zero, and so on.

At brand-name colleges, by contrast, brand value is created by not selling it to very many people. Of course, top colleges also employ renowned scholars who bring honor to the campus. But the foundation of the brand is exclusivity, the signal that the degree bearer joined a high-stakes admissions tournament, fought, and won.

That leaves administrators with few brand-exploitation strategies. You can slap your name on sweatshirts and sell them, but then people start asking uncomfortable questions about labor conditions in sweatshirt factories. You can run a professional sports franchise, as long as you don't mind leaving your brand equity in the hands of a bunch of testosterone-addled 20-year-olds and a coach who makes three times your salary. You can open a branch campus overseas, but there are only so many autocratic petro-states to go around.

Or you can allege that a "world-class" Ivy League graduate education can be had, one weekend a month, for a year, and charge people who believe you $45,551.

Penn is hardly alone in this. Lots of universities are in the "executive education" business, or operate professionally focused graduate programs in which full tuition is expected and admissions standards lag behind those of the undergraduate college. Their brands are strong enough to absorb some profit-taking here and there.

But colleges have historically been limited by physical space and the need to keep the executive-education stuff from getting out of hand. That's why there are no universities on the list of the Top 100 most valuable brands. It's too hard to convert those feelings into value on a global scale.

Until now. One of the most interesting questions in higher education is whether brand-name universities use the Internet to do good, do well, or some combination of the two.

Some are ramping up the grad-school strategy. In recent years, the technology company 2U has "partnered with prestigious colleges and research universities" to deliver a number of "groundbreaking online programs," including teacher training from the University of Southern California, nursing from Georgetown, law from Washington University in St. Louis, and business from the University of North Carolina at Chapel Hill.

Those programs may be quite good. They're certainly not cheap. Their business plan is clearly driven by the value of institutional brands. Investors clearly see potential—venture capitalists have invested nearly $100-million in 2U.

There's another way to think about brands and technology, however. This brings us, of course, to MOOCs. I know: again with the MOOCs. I apologize. Let's set aside for a moment the question of whether MOOCs are the ultimate neoliberal conspiracy or mankind's final redemption, and focus on the fact that they have been powered largely by brands.

Millions of people were already taking online courses in 2011, when The New York Times noticed that thousands were taking a Stanford course online. The MOOC surge has been driven by the warm feelings associated with elite American colleges. Brand equity is obviously the principal admissions criterion for edX and Coursera, and for Udacity by implication, with its pedigree of Stanford origination and Silicon Valley cool.

Ideally, this will allow elite colleges to profit from and enhance their brands at once. Penn can't ever be Coca-Cola. Its brand is tied to the noble purpose of higher learning. If it's seen as a crass profit-taker, the whole thing falls apart. Many observers have asked where the "business plan" is for Harvard, MIT, and other institutions leading MOOCs. That misses the point.

Elite colleges are ultimately in the business of maximizing status, not revenue. Spending a lot of money on things that return a lot of status isn't just feasible for these institutions—it's their basic operating principle. It's not hard to make money when you're already wealthy—witness the performance of the Harvard Management Company over the past 20 years. The difficult maneuver is converting money into status of the rarefied sort that elite institutions crave.

MOOCs offer that opportunity. Elite colleges are willing to run them at a loss forever, because of the good will—and thus status—they create. Free online courses whose quality matches their institutional reputation (a tall order, to be sure, but MOOC providers have strong incentives to get there) could ultimately become as important to institutional status as the traditional markers of exclusivity and scholarly prestige.

Technology, in other words, could give colleges and universities a brand strategy worthy of their names.

Kevin Carey is director of the education-policy program at the New America Foundation.